It still exists; it’s fine - for all intents and purposes. It fizzled out because most of the features people wanted were optional extensions to the protocol, so you wouldn’t have every feature with every client/server.

Say what you want about Matrix, having one company pushing it with a core API and user-facing application that is “good enough” (I’m not a fan of Element myself, but it does the trick for normal people looking to sign up) makes it easier to adopt.

Case in point, check out the software page of the XMPP.org website. For each piece of software there’s a small dropdown showing you how compliant it is with each standard. That kind of decision making - beyond just “which one looks/feels the nicest” - is kind of what’s been holding XMPP back all these years. (in my opinion)

Shame, too, as XMPP has always been pretty great.